The reason why the Union steel ministry preferred a joint venture between government-owned Steel Authority of India Ltd (SAIL) and Korea’s Posco, in preference to a similar proposal from ArcelorMittal, the world’s largest producer in the sector, was technology.
Said an official of the steel ministry: “There were a couple of issues with Arcelor’s proposal. The major reason (for rejecting it) was that Arcelor wasn’t offering any patented technology for steel making, whereas Posco offered us its patented FINEX technology.”
Accordingly, the ministry okayed plans for a tie-up with Posco. The unit, planned to produce three million tonnes annually, with an investment of Rs 15,000 crore, is to be set up in Bokaro district of Jharkhand.
FINEX is a patented Posco technology, that uses non-coking coal to produce steel. Coke is a key ram material in steel making, with iron ore. The coking coal process is costly.
ArcelorMittal had, in April, said the company had sent a proposal to the ministry for a possible JV with SAIL. It hadn’t shortlisted or decided on the location, leaving that decision to SAIL or the ministry. At a media conference earlier this week, a senior manager at Arcelor Mittal had said a discussion on the issue was still on.
However, the steel ministry official said, “Ultimately, we have chosen to go with Posco.” SAIL chief C S Verma said yesterday the deal with Posco would be signed by December.
